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New Jersey Bill Would Allow Utility Customers to Opt Out from Smart Meters, Undermine Federal Program

A bill filed in the New Jersey Assembly would allow customers to opt out of installing “smart meter” technology on their homes and businesses. Passage of this bill would enable residents in these states to protect their own privacy, and it would take a step toward blocking a federal program in effect.

Asm. Ronald Dancer, along with two Republican cosponsors, introduced Assembly Bill 2994 last year and it will carry over to the 2021 session as Assembly Bill 4914 (A4914). The legislation would ensure utility customers can easily opt-out of smart meter programs.

Smart meters monitor home energy usage in minute detail in real-time. The devices transmit data to the utility company where it gets stored in databases. Anybody with access to the data can download it for analysts. Without specific criteria limiting access to the data, these devices create significant privacy issues. Smart meters can also be used to remotely limit power usage during peak hours.

Under the proposed law, utility companies would be required to obtain written consent from customers before installing smart meters.

“An electric public utility shall not install an advanced or smart energy meter unless the electric public utility has obtained the customer’s written consent, as determined by the board, and has provided the customer with a written disclosure detailing the type of data that will be transmitted from a customer’s advanced or smart energy meter to the electric public utility, how the data will be used, and any potential disclosure of the data to a third-party.”

This bill actually goes further than most smart-meter legislation. Instead of putting the onus on the customer to opt out, the utility company must take the initiative and get express consent before installing this technology on a home or business.

Privacy Concerns

The proliferation of smart meters creates significant privacy concerns. lists two broad ways this technology threatens individual privacy.

  • Smart meters will reveal the activities of people inside of a home by measuring their electricity, gas, or water usage frequently over time.
  • inadequate cybersecurity measures surrounding the digital transmission of smart meter data will expose it to misuse by authorized and unauthorized users of the data.

The Electronic Privacy Information Center (EPIC) lists a number of specific potential privacy issues, including identity theft, the ability to determine personal behavior patterns, the ability to perform real-time surveillance, reveal activities through the analysis of residual data, and behavior tracking. According to EPIC, “If plans for national or transnational electric utility smart grid systems proceed as currently proposed these far-reaching networks will enable data collection and sharing across platforms and great distances.”

The data collected can tell anybody who holds it a great deal about what goes on inside a home. It can reveal when residents are at home, asleep, or on vacation. It can also pinpoint “unusual” energy use, and could someday serve to help enforce “energy usage” regulations. The ACLU summarized the privacy issues surrounding smart meters in a recent report.

“The temptation to use the information that will be collected from customers for something other than managing electrical loads will be strong – as it has been for cell phone tracking data and GPS information. Police may want to know your general comings and goings or whether you’re growing marijuana in your basement under grow lights. Advertisers will want the information to sell you a new washing machine to replace the energy hog you got as a wedding present 20 years ago. Information flowing in a smart grid will become more and more ‘granular’ as the system develops.”

The privacy issues aren’t merely theoretical. According to information obtained by the California ACLU, utility companies in the state have disclosed information gathered by smart meters on thousands of customers. San Diego Gas and Electric alone disclosed data on more than 4,000 customers. The vast majority of disclosures were in response to subpoenas by government agencies “often in drug enforcement cases or efforts to find specific individuals,” according to SFGate.

Mark Toney, executive director of the Utility Reform Network watchdog group, said the sheer number of data disclosures made by SDG&E raised the possibility that government agencies wanted to sift through large amounts of data looking for patterns, rather than conducting targeted investigations.

No Smart Meter, No Data

Refusing to allow a smart meter on your property is the only sure-fire way to ensure your energy use data won’t fall into the hands of government agents or private marketers or end up stored in some kind of government database. Passage of A4914 would make opting out a legal option for New Jersians and give them control over their own privacy.

Impact on Federal Program

The federal government serves as a major source of funding for smart meters. A 2009 program through the U.S. Department of Energy distributed $4.5 billion for smart grid technology. The initial projects were expected to fund the installation of 1.8 million smart meters over three years.

The federal government lacks any constitutional authority to fund smart grid technology. The easiest way to nullify such programs is to simply not participate. This legislation would make that possible. If enough states pass similar legislation, and enough people opt out, the program will go nowhere.

We’ve seen a similar opt-out movement undermining Common Core in New York. Opting out follows a strategy James Madison advised in Federalist #46. “Refusal to cooperate with officers of the Union” provides a powerful means to fight back against government overreach. Such actions in multiple states would likely be effective in bringing down federal smart meter programs.


A4914 was referred to the Assembly Telecommunications and Utilities Committee where it must pass by a majority vote before moving forward in the legislative process.


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